September 9, 2022
By Steve Svetlick
Now that the Fed has increased interest rates by 150 basis points to combat inflation, mortgage rates are following right in their footsteps. With mortgage rates nearing 6%, many interested home buyers may have to settle for less home than they anticipated. That being the case, some may choose to rent for a period of time to see where things settle.
While these rate increases put pressure on potential home buyers, it may offer some relief to those who have been seeking a rental and have been unable to find anything, or when they do, the rent is unaffordable. If you are interested in comparing some of the rent decreases that have been reported, you can read this article from CNBC in July.
As more rentals become available, pricing will become competitive, but renter beware! In your zeal to find your ideal rental, make sure you pay attention to potential red flags before you commit.
I just went through an experience with someone trying to rent a home and fortunately, their instincts told them to give me a call when things didn’t seem right. I listened to the details for 60 seconds and knew it was a scam.
After diligently searching for a few months, the right house, in the right location and the right price had all finally come together. I was surprised to hear that the sign out front said that the house was unlocked and that you should feel free to go in and give yourself a “self-guided tour.” If you were interested after that, you could contact the number listed in the Craigslist ad and move forward.
Craigslist in and of itself, has served many people with no issue at all, but there are certainly plenty of scams that begin with their site. In this case, the scammer simply finds a rental property available and lists it on Craigslist as though they are the representing party on the property. As a renter, there really isn’t anything to be too suspicious about yet, other than the ability to freely walk in and out of the place.
After contacting what you believe to be the listing party, you are told that they will need the security deposit, in this case $1,000, and once that is taken care of, you will have a lease agreement to sign and you will be handed the key. Easy enough…
The listing party arranged a meeting to complete the necessaries and my renter headed over to secure his rental. Upon arriving at the location via GPS, he was at a gas station right off the freeway. Sure that he was wrong about the address, he called the listing party and was told that he was in the correct location. The listing party then proceeded to tell him that he needed to go into the gas station and that he would find a Bitcoin ATM. I’m sure you can now guess where this was headed and so did my renter! He walked back outside and called me to go over what was happening. I immediately told him to walk away and that it was absolutely a SCAM! Although it may seem an obvious red flag, if you don’t understand Bitcoin or crypto, you might not know why.
One of the touted advantages of crypto is its privacy features. Using cryptography to encrypt transactions that take place in crypto can make it extremely difficult, if not impossible, to track down who is on the other end of a transaction. Suffice it to say that if the person on the other end knows a thing or two about crypto and you don’t, that money will be gone the instant you deposit it into the machine and hit send. Fortunately, this never happened. While discussing this on the phone, I couldn’t help but also remind my renter that how was he to sign a lease and receive the key to the property when there was no one there to conduct the business. It was as sketchy as it gets.
The scammer of course called within minutes to “check on” the renter and see if he’d sent the funds. As opposed to getting a $1,000 worth of Bitcoin, he got an earful and a hang up.
My renter was disappointed that he wouldn’t be getting the property, but extremely satisfied that he had dodged this scam and still had his $1,000. He then called the actual realtor listed on the property sign to inform them of what was going on, and in the process, found out that the property was not being rented for $925 per month at all, but $1,800 per month, which was way more than he was willing to pay.
Before the end of the day, he had found yet another property and reached out to the listing party – can you guess who it might have been? Yep – the same guy!!! Different number, different property, same scam – my renter recognized him immediately and told him to get a real job!
Hopefully this article will make you closely scrutinize your next attempt to rent, but before we wrap up, I would just like you to note that this is not crypto’s fault. Crypto gets a bad rap for criminal activity, but crypto is not the criminal here. You simply have a scammer, using crypto as the vehicle for his scam – HE, and those like him, are the criminals!